Thomson Reuters
Provides Information Related to Its Future Financial Reporting and
Outlook
TORONTO, May 2, 2018 -- Thomson Reuters (NYSE / TRX:
TRI) today provided information related to the company's future
financial reporting in connection with its proposed transaction to
sell a majority interest in its Financial & Risk (F&R)
business. The company will report its first-quarter earnings on
May 11, 2018.
Logo -
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The information in this news release supplements the company's
announcement on January 30, 2018 that
it signed a definitive agreement to sell 55% of its F&R
business to private equity funds managed by Blackstone. As
previously announced, the proposed transaction is expected to close
in the second half of the year and is subject to specified
regulatory approvals and customary closing conditions.
Pre-Closing Financial Reporting
F&R will be reported as a discontinued operation in the
company's ongoing 2018 results beginning with its first-quarter
results and continuing through the closing date of the
transaction.
-
Prior to the closing, 100% of F&R's results will be reported
in a single line item on the company's income statement titled
"Earnings from Discontinued Operations, net of Tax." The
presentation of results for 2017 in the company's ongoing 2018
results will also be restated to reflect F&R as a discontinued
operation.
-
The following supplemental information will be provided for the
F&R business for each quarter:
-
Revenues and related growth rate
-
Adjusted EBITDA, related growth rate and corresponding
margin
-
Capital expenditures
-
Free cash flow
-
Debt outstanding (provided post-closing)
Thomson Reuters will continue to retain full ownership of its
Legal, Tax & Accounting and Reuters News businesses (effective
January 1, 2018, Reuters News is a
reportable segment).
-
Attached to this news release are restated non-IFRS results for
the full-year 2017.
-
Thomson Reuters' non-IFRS measures, including adjusted earnings
per share (EPS), will exclude F&R's results except for free
cash flow.
-
The company's Legal business unit has been restated to include
the Regulatory Intelligence and Compliance Learning businesses that
Thomson Reuters will retain as part of the transaction. These
businesses generated approximately $69
million of revenues in 2017. Results for these businesses
were previously reflected in F&R's results.
-
Quarterly restatements for 2017 will be provided with the
release of the first-quarter 2018 results.
Shares outstanding
As of April 30, 2018, the company
had 711,640,953 common shares outstanding. The company has not
repurchased any shares this year.
Full-Year 2018 Business Outlook
On May 11, 2018, the company plans
to provide a full-year 2018 business outlook for its continuing
operations on a consolidated basis. The company's 2018 outlook will
exclude F&R.
The company previously announced that it expects to retain
stranded costs in 2018, 2019 and 2020 that will not be eliminated
with the sale of the 55% interest in F&R. The company will
provide an update of these expected costs when it reports its
first-quarter 2018 results. These costs will be included in the
company's non-IFRS measures and outlook.
The company also expects to incur costs and will make
investments in 2018 and 2019 in the ongoing Thomson Reuters
business resulting from the operational separation of F&R from
the rest of the company.
-
These costs and investments are expected to be incurred starting
in the second quarter of 2018.
-
An estimate of these costs and investments will be provided as
part of the 2018 outlook.
-
These costs and investments will be included in the company's
non-IFRS measures.
-
These costs and investments are included in the estimate of
transaction-related expenses and taxes of $1.5 billion - $2.5
billion, as previously disclosed.
Post-Closing Financial Reporting
Following the closing of the transaction, the company's IFRS
results will include the company's 45% share of F&R's results
reported in a single line item on the company's income statement
titled "Share of post-tax earnings in equity method investments".
The company's non-IFRS measures, including adjusted earnings, will
exclude its share of post-tax earnings in equity method
investments.
Thomson Reuters
Thomson Reuters is the world's leading source of news and
information for professional markets. Our customers rely on us to
deliver the intelligence, technology and expertise they need to
find trusted answers. The business has operated in more than 100
countries for more than 100 years. Thomson Reuters shares are
listed on the Toronto and New York
Stock Exchanges. For more information, visit
www.thomsonreuters.com.
NON-IFRS FINANCIAL MEASURES
Thomson Reuters prepares its financial statements in accordance
with International Financial Reporting Standards (IFRS), as issued
by the International Accounting Standards Board (IASB). This news
release includes certain non-IFRS financial measures, such as
adjusted EBITDA, adjusted earnings and adjusted EPS. Thomson
Reuters uses non-IFRS financial measures as supplemental indicators
of its operating performance and financial position. These measures
do not have any standardized meanings prescribed by IFRS and
therefore are unlikely to be comparable to the calculation of
similar measures used by other companies, and should not be viewed
as alternatives to measures of financial performance calculated in
accordance with IFRS. Non-IFRS financial measures are defined and
reconciled to the most directly comparable IFRS measures in Thomson
Reuters 2017 annual report.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this news release are forward-looking,
including the company's expectations regarding the timing for
closing of the proposed Financial & Risk transaction. These
forward-looking statements are based on certain assumptions and
reflect our company's current expectations. As a result,
forward-looking statements are subject to a number of risks and
uncertainties that could cause actual results or events to differ
materially from current expectations. There is no assurance that a
transaction involving all or part of the Financial & Risk
business will be completed or that other events described in any
forward-looking statement will materialize. You are cautioned not
to place undue reliance on forward-looking statements which reflect
expectations only as of the date of this news release. Except as
may be required by applicable law, Thomson Reuters disclaims any
obligation to update or revise any forward-looking
statements.
CONTACTS |
MEDIA
David Crundwell
Senior Vice President, Corporate Affairs
+1 416 649 9904
david.crundwell@tr.com |
INVESTORS
Frank J. Golden
Senior Vice President, Investor Relations
+1 646 223 5288
frank.golden@tr.com |
Appendix A
Thomson Reuters Corporation
Supplemental Information
(Excluding the Financial & Risk (F&R) segment)
(millions of U.S. dollars, except for per share amounts)
(unaudited) |
|
|
|
|
This unaudited
restatement is provided to illustrate the Company's business on a
continuing operations basis. As it includes certain
estimates, it is subject to revision until the proposed transaction
is completed. |
|
|
|
|
|
Year Ended
December 31,
2017 |
Adjustments |
Year Ended
December 31,
2017 |
|
Previously
Reported |
Remove F&R
Segment
Results |
Add Back
Retained
Businesses(4) |
Other
Adjustments(5) |
Restated
Excluding F&R |
Revenues |
|
|
|
|
|
Financial & Risk |
$6,112 |
(6,112) |
- |
- |
- |
Legal |
3,390 |
- |
69 |
- |
$3,459 |
Tax & Accounting |
1,551 |
- |
- |
- |
1,551 |
Reuters News(1) |
296 |
- |
- |
- |
296 |
Eliminations |
(16) |
7 |
- |
- |
(9) |
Revenues from continuing
operations |
$11,333 |
(6,105) |
69 |
- |
$5,297 |
|
|
|
|
|
|
Adjusted EBITDA(2) |
|
|
|
|
|
Financial & Risk |
$1,916 |
(1,916) |
- |
- |
- |
Legal |
1,279 |
- |
28 |
- |
$1,307 |
Tax & Accounting |
495 |
- |
- |
- |
495 |
Reuters News(1) |
27 |
- |
- |
- |
27 |
Corporate |
(280) |
- |
- |
36 |
(244) |
Adjusted EBITDA |
$3,437 |
(1,916) |
28 |
36 |
$1,585 |
|
|
|
|
|
|
Adjusted earnings |
|
|
|
|
|
Adjusted EBITDA |
$3,437 |
(1,916) |
28 |
36 |
$1,585 |
Depreciation and amortization of computer
software |
(995) |
581 |
(10) |
(72) |
(496) |
Adjustments: |
|
|
|
|
|
Interest |
(362) |
- |
- |
4 |
(358) |
Tax |
(205) |
121 |
(2) |
3 |
(83) |
Non-controlling interests |
(64) |
- |
- |
64 |
- |
Dividends declared on preference
shares |
(2) |
- |
- |
- |
(2) |
Adjusted earnings(3) |
$1,809 |
(1,214) |
16 |
35 |
$646 |
|
|
|
|
|
|
Adjusted EPS(3) |
$2.51 |
(1.68) |
0.02 |
0.05 |
$0.90 |
(1) |
Effective January 1, 2018, Reuters News is a
reportable segment. |
(2) |
Thomson Reuters defines adjusted EBITDA for its
business units as earnings from continuing operations before tax
expense or benefit, net interest expense, other finance costs or
income, depreciation, amortization of software and other
identifiable intangible assets, Thomson Reuters share
of post-tax (earnings) losses in equity method
investments, other operating gains and losses, certain asset
impairment charges, fair value adjustments and corporate related
items. Consolidated adjusted EBITDA is comprised of adjusted EBITDA
for its business units and Corporate. Thomson Reuters uses adjusted
EBITDA because it provides a consistent basis to evaluate operating
profitability and performance trends by excluding items that the
company does not consider to be controllable activities for this
purpose. Adjusted EBITDA also represents a measure commonly
reported and widely used by investors as a valuation metric.
Additionally, this measure is used by Thomson Reuters and investors
to assess a company's ability to incur and service debt. Refer to
the company's 2017 Annual Report for a reconciliation of this
non-IFRS financial measure to the most directly comparable IFRS
measure. |
(3) |
Adjusted earnings and adjusted EPS include
dividends declared on preference shares but exclude
the post-tax impacts of fair value adjustments,
amortization of other identifiable intangible assets, other
operating gains and losses, certain asset impairment charges, other
finance costs or income, Thomson Reuters share
of post-tax (earnings) losses in equity method
investments, discontinued operations and other items affecting
comparability. Thomson Reuters calculates
the post-tax amount of each item excluded from adjusted
earnings based on the specific tax rules and tax rates associated
with the nature and jurisdiction of each item. Adjusted EPS is
calculated using diluted weighted-average shares and does not
represent actual earnings or loss per share attributable to
shareholders. Thomson Reuters uses adjusted earnings and adjusted
EPS as they provide a more comparable basis to analyze earnings and
they are also measures commonly used by shareholders to measure the
company's performance. Refer to the company's 2017 Annual Report
for reconciliations of these non-IFRS financial measures to the
most directly comparable IFRS measures. |
(4) |
Represents the Regulatory Intelligence and
Compliance Learning businesses that will be retained by the
company's Legal segment following the closing of the proposed
F&R transaction. |
(5) |
Other adjustments include the following: |
|
- Adjusted EBITDA contains costs primarily for real estate
optimization that relate to properties to be transferred with the
F&R business.
- Depreciation and amortization of computer software relates to
assets that will not be transferred with the F&R business.
- Non-controlling interests relates to third party shareholdings
in Tradeweb that will be transferred with the F&R
business.
|
|